Wallace found responsible for sewage plant deficiencies

July 5, 2011

By KAREN VELIE

Penalties against the chief operator at the south San Luis Obispo County sewage plant for failing to properly oversee the treatment facility have been reduced following an appeal that blamed administrator John Wallace for much of the plant’s problems.

Following reports by several employees that the chief plant operator and the administrator at the South San Luis Obispo County Sanitation District were failing to follow state and federal laws in place to protect the environment, the state issued the plant a notice of violation in July 2010.

In January, the State Water Resource Control Board determined Jeff Appleton, South San Luis Obispo County Sanitation District’s chief plant operator, operated the plant “using fraud and deception,” according to a letter of proposed disciplinary action.

Specifically, the state found Appleton had failed to update the operations manual, keep required records and had ordered staff to dump samples that showed the plant was not in compliance.

The state proposed that Appleton’s plant operator certificate be downgraded, which would have made him ineligible to manage the plant.

Appleton appealed, claiming that Wallace refused to allow him to update the operations manual because it was “too expensive.” The manual provides directives in case of emergencies and is required by law to be updated when the plant is modified.

The manual, written in 1992, did not describe operating procedures for the chlorine tanks or the effluent pumping stations which were installed after 1992.

In the state’s response to Appleton’s appeal, it says that emails provide evidence that in 2004, 2007 and 2009, Wallace was informed of problems with operating procedures but refused to fund the cost of updating procedures until the state issued a notice of violation against the plant in July 2010.

“While having an outdated and incomplete operating manual no doubt made it more difficult for the operators to perform their duties, it appears that you took reasonable steps to inform your superiors of the need to update it,” the state says in its response to Appleton’s appeal. “Although you might be faulted for not pursuing more forcefully the funds to update the operating manual, your responsibilities as the chief plant operator was to operate the facility and ensure that your subordinates performed their operational duties correctly.

“You did not have an obligation to perform engineering work for which you were not qualified.”

Wallace is the chief administrator of the district, which provides services to about 38,000 customers in Arroyo Grande, Grover Beach and Oceano. He is also owner and president of the Wallace Group, a private engineering consulting firm located in San Luis Obispo that receives about $50,000 to $80,000 a month for plant administration and engineering services.

In June, the San Luis Obispo County Grand Jury validated allegations that Wallace as the plant administrator has been funneling millions of dollars to his private engineering company without proper oversight and that a conflict of interest exists because Wallace is the plant administrator while his firm retains the engineering contract.

The Grand Jury recommended that the sanitation district board consider hiring a new administrator and that the county auditing division should consider doing an audit.

In July 2010, a few days after the state hit the plant with a notice of violation, Appleton applied for stress leave. He went back to work in the early part of December 2010.

On December 18, as the result of influent pump failures, as much as 3 million gallons of raw sewage was dumped into Oceano neighborhoods, beaches and the Pacific Ocean.

In January, the state proposed disciplinary action against Appleton which would have resulted in a one year downgrading of his operator’s license.

A few days later Appleton again applied for sick leave.

As a result of Appleton’s appeal, the state reversed its decision to modify Appleton’s license and instead issued a letter or reprimand. The state found Appleton had willfully or neglectfully violated sampling procedures.

Appleton has 30 days to object to the state water board’s decision.

Meanwhile, the district was served another notice of violation in May because of the December spill. Wallace responded to the violation last month and is awaiting the state’s response which could include fines of up to $30 million that would fall on the communities and the rate payers.

If the state determines Wallace failed to accurately respond to the mandated report he could face criminal action, according to the notice.

At an Oceano Community Service District Board meeting, Wallace said he expects the state to level fines and that the district along with the communities would be responsible for covering the costs.

 

In addition, the district is battling lawsuits from two former employees who claim they were fired for whistle blowing. According to the July 6 agenda, the district is slated to discuss a liability claim by Appleton against the district in closed session. Last month, on top of fees paid to Wallace, the Wallace Group and the sewage district’s attorney, the district reimbursed Wallace $12,522 for legal fees he paid to the San Luis Obispo-based attorney firm Andre, Morris and Buttery for legal fees for battling lawsuits.